IFRS requires the allowance method of accounting for bad debts when bad debts are immaterial in amount.

Question

Quizplus · Accepted Answer

IFRS allows for either the direct write-off method or the allowance method for accounting for bad debts, but the allowance method is preferred. Additionally, while materiality may be a consideration in determining the appropriate amount of the allowance, it is not relevant to whether the allowance method should be used or not.

IFRS Requires the Allowance Method of Accounting for Bad Debts